The Battle of Bayonne: Turf Wars Over Satellite Emergency Departments

Source: New Jersey Spotlight
Surrounded on three sides by parts of Upper New York Bay and fenced in by the New Jersey Turnpike on the fourth, Bayonne — with roughly 65,400 residents — feels like a small town far from the rest of Hudson County’s urban boom. But in the past few years, this quiet, working-class community has become ground zero for a battle between two prominent healthcare organizations seeking to expand their reach by building detached emergency facilities.
These satellite emergency departments (SEDs) can provide urgent care on an outpatient basis, or connect patients to existing hospitals if they need long-term treatment. While costly to build and staff, and not always successful, SEDs can also benefit hospitals by serving as another “front door” for potential admissions, a significant source of revenue.
Both RWJBarnabas Health, New Jersey’s largest provider group, a not-for-profit with more than a dozen hospitals statewide and thousands of providers, and CarePoint Health, a for-profit company that operates three acute-care facilities and other services in Hudson County, have sought state permission to build SEDs in the area.
Between them, some 10 sites are under discussion and applications have been filed for at least a half dozen — an unprecedented level of interest, according to state officials. In the past decade and a half, New Jersey regulators have approved a total of nine SEDs statewide. They have yet to turn down a request.
And while the state has granted approval for one request from Barnabas, to open an SED in Bayonne, at least a half-dozen others submitted by CarePoint are still pending. State officials declined to say if the Barnabas approval will affect their decision on the CarePoint submissions.
The dispute has also grown to include other powerful stakeholders. Community advocates and two-dozen clergy members associated with the National Action Network, a justice advocacy organization led by Rev. Al Sharpton, have raised concerns about the lack of healthcare services in one neighborhood central to the discussion. They have also urged the state to side with CarePoint.
The Barnabas application was backed by a trio of health insurance companies, a variety of elected officials, and hundreds of people who signed a petition to support the Bayonne SED, according to state documents.
In fact, Barnabas Health president and CEO Barry Ostrowsky told NJ Spotlight last year that Horizon Blue Cross Blue Shield, the state’s largest insurance company with 3.8 million members, had encouraged his organization to construct a free-standing emergency facility as a way to connect more Horizon patients in the area with providers that are part of its network.
CarePoint has drawn fire from insurance companies for its reluctance to join their networks, a contractual arrangement designed to trade lower payments for higher patient volumes. CarePoint has defended this out-of-network strategy as a necessary business decision in its quest to revive financially struggling hospitals in a growing urban area.
This situation led CarePoint to challenge Horizon in court for an alleged $76 million in unpaid claims. Reports surfaced last week that the two may soon come to an agreement that brings CarePoint facilities into Horizon’s insurance network — something neither side disputed.

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